The number of debt-backed buyers at auctions has risen by almost a quarter, according to the latest figures from bridging loan provider Auction Finance.
It recorded a 23% rise in loans on residential auction assets in the period from June this year. Year-on-year, loan completions are up by around one-fifth.
The group said the increase was being driven by returning confidence in the market.
It added that the rise was by far the largest seen since the onset of the downturn, with transaction levels remaining broadly level between 2009 and 2011, before increases of around 10% in 2010-11 and 2011-12.
The size of loans agreed has fallen during the period, however, from £90,000 to £67,500. Auction Finance said this was due to a change in investment targets for auction buyers, who were now focusing on buy-to-let properties.
According to the latest Essential Information Group figures, 4.6% more lots were sold in September compared with September 2012, with a 5% rise in the value of sales.
Values also rose by 12.2% on the quarter and 7.8% on the year to date, but there has been little indication of increasing debt availability to buyers.
Auction Finance director Chris Baguley said the majority of the increase was coming from high net worth investors in and around the North West, though loans were still difficult to stack up outside the M25.
“There’s been a complete shift. One of the issues over the past few years has been the lack of availability in the refinance market, with lenders being very restrictive. We’re seeing that slowly diminishing – some lenders will now refinance after three months, and some even after one month.”
He added: “And there’s been an increase in activity in the land loan market, with or without planning, as well as so-called ‘zombie properties’ – secondary industrial sites which clients are buying speculatively at low prices but planning no immediate development.”
The share of lending in the North West has seen the most marked increase and now represents almost 60% of Auction Finance’s lending, while creditors are still reluctant to look as far afield as Scotland and Northern Ireland, according to Baguley.
chris.berkin@estatesgazette.com
